Military Child Education Coalition
December 31, 2019 and 2018
Financial Statements
MILITARY CHILD EDUCATION COALITION
FINANCIAL STATEMENTS AS OF
December 31, 2019 and 2018
TOGETHER WITH INDEPENDENT AUDITORS’ REPORT THEREON
C O N T E N T S
Independent Auditors’ Report 1 - 2
Statements of Financial Position 3
Statement of Activities – For the Year Ended 2019 4
Statement of Activities – For the Year Ended 2018 5
Statement of Functional Expenses – For the Year Ended 2019 6 - 9
Statement of Functional Expenses – For the Year Ended 2018 10 - 13
Statements of Cash Flows 14
Notes to Financial Statements 15 - 26
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INDEPENDENT AUDITORS’ REPORT
To the Board of Directors of Military Child Education Coalition
We have audited the accompanying financial statements of Military Child Education Coalition (a non-profit
organization), which comprise the statements of financial position as of December 31, 2019 and 2018, and the
related statements of activities and changes in net assets, functional expenses and cash flows for the years then ended, and the related notes to financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance
with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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INDEPENDENT AUDITORS’ REPORT
(CONTINUED)
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Military Child Education Coalition as of December 31, 2019 and 2018, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in
the United States of America.
Other Matters
Contract revenue secured by the fund development team has been reclassified from philanthropic revenue to contract revenue as described in Note 14. The reclassification was done to more appropriately match the
presentation of these transactions in the financial statement with the nature of the transactions.
Temple, Texas
June 22, 2020
MILITARY CHILD EDUCATION COALITION
STATEMENTS OF FINANCIAL POSITION
December 31, 2019 and 2018
The accompanying notes are an integral part of the financial statements.
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2019 2018
Current Assets
Cash and cash equivalents 1,915,657$ 1,984,292$
Cash and cash equivalents, restricted 451,519 336,051
Accounts receivable 190,994 404,635
Accounts receivable, restricted 350,900 60,000
Inventory 152,575 144,523
Prepaid expenses 61,205 103,135
Total Current Assets 3,122,850 3,032,636
Property and equipment, net 1,531,876 1,605,238
Total Assets 4,654,726$ 4,637,874$
Liabilities
Accounts payable 155,660$ 159,140$
Accrued expenses 190,465 185,995
Deferred revenue 657,290 645,537
Total Liabilities 1,003,415 990,672
Net Assets
Without donor restrictions 2,848,892 3,251,151
With donor restrictions 802,419 396,051
Total Net Assets 3,651,311 3,647,202
Total Liabilities and Net Assets 4,654,726$ 4,637,874$
ASSETS
LIABILITIES AND NET ASSETS
MILITARY CHILD EDUCATION COALITION
STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
For the Year Ended December 31, 2019
The accompanying notes are an integral part of the financial statements.
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Without Donor With Donor
Restrictions Restrictions Total
Revenues, Gains and Other Support
Service contract revenue 2,318,333$ -$ 2,318,333$
Philanthropic contract revenue 1,333,777 - 1,333,777
Contributions 202,801 856,604 1,059,405
Membership dues 44,852 - 44,852
Conference income 416,483 - 416,483
Products and services 62,775 - 62,775
Grants 529,009 589,000 1,118,009
Fundraising events 916 27,500 28,416
Interest and dividends 25,726 - 25,726
Miscellaneous revenue 24,805 - 24,805
Net assets released from restrictions 1,066,736 (1,066,736) -
Total Revenues, Gains and Other Support 6,026,213 406,368 6,432,581
Expenses
Program services
Student initiatives 345,981 - 345,981
Parent initiatives 952,250 - 952,250
Professional development 782,637 - 782,637
Military student transition consultant 1,167,355 - 1,167,355
Strategic communications 556,914 - 556,914
Products and services 246,123 - 246,123
Research 189,073 - 189,073
Website and technology resources 190,088 - 190,088
Grants 128,923 - 128,923
National training seminar 932,204 - 932,204
Total program services 5,491,548 - 5,491,548
Supporting services
Management and general 441,281 - 441,281
Fundraising 495,643 - 495,643
Total Expenses 6,428,472 - 6,428,472
Change in net assets (402,259) 406,368 4,109
Net Assets
Beginning of year 3,251,151 396,051 3,647,202
End of year 2,848,892$ 802,419$ 3,651,311$
MILITARY CHILD EDUCATION COALITION
STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
For the Year Ended December 31, 2018
The accompanying notes are an integral part of the financial statements.
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Without Donor With Donor
Restrictions Restrictions Total
Revenues, Gains and Other Support
Service contract revenue 2,864,645$ -$ 2,864,645$
Philanthropic contract revenue 1,335,518 - 1,335,518
Contributions 309,766 842,437 1,152,203
Membership dues 66,436 - 66,436
Conference income 439,888 - 439,888
Products and services 94,117 - 94,117
Grants 355,411 700,991 1,056,402
Fundraising events 3,133 26,000 29,133
Interest and dividends 21,462 - 21,462
Miscellaneous revenue 14,627 - 14,627
Net assets released from restrictions 1,715,027 (1,715,027) -
Total Revenues, Gains and Other Support 7,220,030 (145,599) 7,074,431
Expenses
Program services
Student initiatives 404,632 - 404,632
Parent initiatives 662,407 - 662,407
Professional development 986,232 - 986,232
Military student transition consultant 1,127,908 - 1,127,908
Strategic communications 513,204 - 513,204
Products and services 243,289 - 243,289
Research 148,322 - 148,322
Website and technology resources 155,758 - 155,758
Grants 1,077,028 - 1,077,028
National training seminar 678,484 - 678,484
Total program services 5,997,264 - 5,997,264
Supporting services
Management and general 479,208 - 479,208
Fundraising 507,550 - 507,550
Total Expenses 6,984,022 - 6,984,022
Change in net assets 236,008 (145,599) 90,409
Net Assets
Beginning of year 3,015,143 541,650 3,556,793
End of year 3,251,151$ 396,051$ 3,647,202$
MILITARY CHILD EDUCATION COALITION
STATEMENT OF FUNCTIONAL EXPENSES
For the Year Ended December 31, 2019
The accompanying notes are an integral part of the financial statements. (Continued)
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Military Student
Student Parent Professional Transition
Initiatives Initiatives Development Consultant
Payroll 153,164$ 552,701$ 247,678$ 999,306$
Payroll taxes 11,288 40,879 18,492 72,999
Other employee benefits 1,840 10,232 18,786 47,685
Service fees 760 257,452 3,286 4,081
Advertising - - - -
Office expenses 38,430 60,572 174,499 19,432
Information technology - - - -
Occupancy - - 5,772 -
Travel 99,652 12,183 159,367 21,535
Insurance - - 2,380 -
Other program expenses 40,847 12,620 131,259 2,082
Accounting and legal fees - - - -
Total expenses before
depreciation 345,981 946,639 761,519 1,167,120
Depreciation - 5,611 21,118 235
Total Expenses 345,981$ 952,250$ 782,637$ 1,167,355$
Program Services
MILITARY CHILD EDUCATION COALITION
STATEMENT OF FUNCTIONAL EXPENSES
For the Year Ended December 31, 2019
The accompanying notes are an integral part of the financial statements. (Continued)
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Website and
Strategic Products Technology
Communications and Services Research Resources
Payroll 415,665$ 108,991$ 158,676$ 62,478$
Payroll taxes 30,767 7,818 11,733 4,626
Other employee benefits 19,003 10,680 9,998 6,037
Service fees 2,495 1,721 1,112 205
Advertising 762 - - -
Office expenses 41,564 10,509 1,123 466
Information technology - - - 68,681
Occupancy 4,329 20,922 1,443 1,443
Travel 1,943 - - -
Insurance 3,453 6,224 2,859 429
Other program expenses 29,583 60,915 - -
Accounting and legal fees - - - -
Total expenses before
depreciation 549,564 227,780 186,944 144,365
Depreciation 7,350 18,343 2,129 45,723
Total Expenses 556,914$ 246,123$ 189,073$ 190,088$
Program Services
MILITARY CHILD EDUCATION COALITION
STATEMENT OF FUNCTIONAL EXPENSES
For the Year Ended December 31, 2019
The accompanying notes are an integral part of the financial statements. (Continued)
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National Total
Training Program
Grants Seminar Services
Payroll 102,302$ 125,311$ 2,926,272$
Payroll taxes 7,538 9,297 215,437
Other employee benefits 7,925 3,294 135,480
Service fees 606 4,848 276,566
Advertising - - 762
Office expenses 3,122 58,836 408,553
Information technology - - 68,681
Occupancy - - 33,909
Travel 1,255 147,203 443,138
Insurance 556 1,944 17,845
Other program expenses 2,061 581,236 860,603
Accounting and legal fees - - -
Total expenses before
depreciation 125,365 931,969 5,387,246
Depreciation 3,558 235 104,302
Total Expenses 128,923$ 932,204$ 5,491,548$
Program Services
MILITARY CHILD EDUCATION COALITION
STATEMENT OF FUNCTIONAL EXPENSES
For the Year Ended December 31, 2019
The accompanying notes are an integral part of the financial statements.
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Management
and 2019
General Fundraising Total
Payroll 303,561$ 387,881$ 3,617,714$
Payroll taxes 22,988 28,922 267,347
Other employee benefits 8,721 17,742 161,943
Service fees 7,492 7,004 291,062
Advertising - - 762
Office expenses 12,512 27,154 448,219
Information technology - - 68,681
Occupancy 7,180 2,886 43,975
Travel - 11,379 454,517
Insurance 5,309 1,963 25,117
Other program expenses 30,717 7,163 898,483
Accounting and legal fees 35,200 - 35,200
Total expenses before
depreciation 433,680 492,094 6,313,020
Depreciation 7,601 3,549 115,452
Total Expenses 441,281$ 495,643$ 6,428,472$
MILITARY CHILD EDUCATION COALITION
STATEMENT OF FUNCTIONAL EXPENSES
For the Year Ended December 31, 2018
The accompanying notes are an integral part of the financial statements. (Continued)
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Military Student
Student Parent Professional Transition
Initiatives Initiatives Development Consultant
Payroll 150,802$ 456,556$ 314,793$ 941,125$
Payroll taxes 11,462 34,044 23,245 70,928
Other employee benefits 1,123 5,818 8,003 53,340
Service fees - 5,628 9,414 3,987
Advertising - - - -
Office expenses 58,215 66,840 221,382 15,842
Information technology - - - -
Occupancy 1,804 1,804 1,859 -
Travel 122,431 76,749 188,751 16,971
Insurance - - 4,186 -
Other program expenses 57,786 8,903 182,377 21,645
Accounting and legal fees - - - -
Total expenses before
depreciation 403,623 656,342 954,010 1,123,838
Depreciation 1,009 6,065 32,222 4,070
Total Expenses 404,632$ 662,407$ 986,232$ 1,127,908$
Program Services
MILITARY CHILD EDUCATION COALITION
STATEMENT OF FUNCTIONAL EXPENSES
For the Year Ended December 31, 2018
The accompanying notes are an integral part of the financial statements. (Continued)
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Website and
Strategic Products Technology
Communications and Services Research Resources
Payroll 391,342$ 105,096$ 71,014$ 56,905$
Payroll taxes 29,311 7,971 5,231 4,303
Other employee benefits 16,397 11,971 7,151 5,628
Service fees 3,645 725 49,442 242
Advertising 7,146 - - -
Office expenses 26,495 13,336 11,098 297
Information technology - - - 58,748
Occupancy 4,101 19,821 1,367 1,367
Travel 1,443 - - -
Insurance 4,020 5,756 1,840 397
Other program expenses 24,577 62,134 - -
Accounting and legal fees - - - -
Total expenses before
depreciation 508,477 226,810 147,143 127,887
Depreciation 4,727 16,479 1,179 27,871
Total Expenses 513,204$ 243,289$ 148,322$ 155,758$
Program Services
MILITARY CHILD EDUCATION COALITION
STATEMENT OF FUNCTIONAL EXPENSES
For the Year Ended December 31, 2018
The accompanying notes are an integral part of the financial statements. (Continued)
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National Total
Training Program
Grants Seminar Services
Payroll 436,303$ 126,808$ 3,050,744$
Payroll taxes 32,651 9,068 228,214
Other employee benefits 15,718 110 125,259
Service fees 257,428 4,855 335,366
Advertising - - 7,146
Office expenses 72,903 40,694 527,102
Information technology - - 58,748
Occupancy - - 32,123
Travel 191,189 48,114 645,648
Insurance 699 2,540 19,438
Other program expenses 69,491 446,060 872,973
Accounting and legal fees - - -
Total expenses before
depreciation 1,076,382 678,249 5,902,761
Depreciation 646 235 94,503
Total Expenses 1,077,028$ 678,484$ 5,997,264$
Program Services
MILITARY CHILD EDUCATION COALITION
STATEMENT OF FUNCTIONAL EXPENSES
For the Year Ended December 31, 2018
The accompanying notes are an integral part of the financial statements.
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Management
and 2018
General Fundraising Total
Payroll 323,572$ 393,818$ 3,768,134$
Payroll taxes 22,937 29,514 280,665
Other employee benefits 30,843 19,482 175,584
Service fees 6,223 7,461 349,050
Advertising - - 7,146
Office expenses 13,297 17,342 557,741
Information technology - - 58,748
Occupancy 26,849 2,734 61,706
Travel - 22,174 667,822
Insurance 4,317 2,237 25,992
Other program expenses 5,883 9,816 888,672
Accounting and legal fees 36,500 - 36,500
Total expenses before
depreciation 470,421 504,578 6,877,760
Depreciation 8,787 2,972 106,262
Total Expenses 479,208$ 507,550$ 6,984,022$
MILITARY CHILD EDUCATION COALITION
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2019 and 2018
The accompanying notes are an integral part of the financial statements.
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2019 2018
Cash Flows Provided by Operating Activities
Change in net assets 4,109$ 90,409$
Adjustments to reconcile change in nets assets
to net cash provided by operating activities:
Depreciation 115,452 106,262
Gain (loss) on disposal of assets (503) 675
(Increase) decrease in:
Accounts receivable 213,641 (116,457)
Accounts receivable, restricted (290,900) 60,000
Inventory (8,052) 12,182
Prepaid expenses 41,930 (49,929)
Increase in:
Accounts payable (3,480) 32,002
Accrued liabilities 4,470 32,827
Deferred revenue 11,753 28,239
Net adjustment 84,311 105,801
Net cash provided by operating activities 88,420 196,210
Cash Flows Used by Investing Activities
Purchase of property and equipment (41,587) (118,927)
Net cash used by investing activities (41,587) (118,927)
Net increase in cash and cash equivalents 46,833 77,283
Cash and cash equivalents
Beginning of year 2,320,343 2,243,060
End of year 2,367,176$ 2,320,343$
Cash and cash equivalent:
Unrestricted 1,915,657$ 1,984,292$
Restricted 451,519 336,051
2,367,176$ 2,320,343$
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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1. Description of the Organization
The Military Child Education Coalition®, (hereafter referred to as MCEC) is a 501(c)(3) global, nonprofit
organization focused exclusively on the well-being and needs of America’s approximately four million military-connected children, specifically in the areas of academic opportunity and excellence, school
transition support, and developmental needs. Our core constituency is children and youth whose parents are
serving or have served in our nation’s military. Our goal is to ensure that every military-connected child grows and thrives through good and challenging times to be college, workplace, and ultimately, life-ready.
For over 20 years, MCEC has successfully delivered student, parent, and professional development
programs and services for the Department of Defense, all branches of the military, and their supporting installations, as well as public and private schools serving military families throughout the country. Since
its inception in 1998, MCEC has spearheaded numerous initiatives addressing the education needs of
military-connected children as they face their unique challenges related to a military lifestyle characterized by mobility, transition, deployments and family separation. MCEC Programs, Trainings and Initiatives are
as follows:
Student Initiatives - MCEC provides support to military-connected children through their peer-to-peer
mentoring programs:
Student 2 Student®, - MCEC Student Programs for elementary, middle school, and high school
levels help students transition into new schools. S2S is a student-led program with the mission to take care of new students. An S2S program shows students their new campus and community. The
team plans fun ways for new students to get to know other students, to build new peer groups, and to
perform better academically. S2S team members will make a difference as they work together to
serve their campus, community, and the world. These programs are in schools both in the United States and overseas. School personnel and students are trained to develop a program that assists
other students in finding their way, relationships, academics, service and leadership in their school
and community through our peer-to-peer mentoring programs. MCEC actively supports trained programs through newsletters, webinars, recorded teleconferences, and student team challenges.
This program encourages teams to do their best and work to reach every student that transitions
in and out of their schools.
Frances Hesselbein Student Leadership Program (FHSLP) - The mission of the FHSLP is to grow and sustain the Student 2 Student® (S2S™) Program on the local campus. Established by Military
Child Education in 2006, the FHSL Program offers an intensive experience for selected 10 th and 11th
Student 2 Student members to enrich their leadership and team building skills. The program is offered twice a year at West Point in October and Air Force Academy in spring.
West Point - The students learn leadership skills from West Point faculty, distinguished guest
lecturers, and hands–on activities. These experiences are similar to what our future military leaders learn prior to starting their careers as officers. The evening activities include building
lifelong connections with their teammates and sharing their own S2S programs and goal setting
with their new teammates.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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US Air Force Academy - A team of senior cadets majoring in Behavioral Science and Leadership build the annual Frances Hesselbein program starting the fall of their senior year. The week’s
learning is structured around the core leadership principles taught to the cadets. The students are
taught by the cadets and are provided experiences that build on the leadership principles. The week ends with a goal setting session for students to take back to their campus and implement.
Parent Initiatives - The MCEC Parent to Parent ™ program is focused on empowering parents to be their child's strongest advocate on educational and transition issues. A team of parents from installation areas are trained to bring the MCEC Parent Workshops to their local communities and implement effective
solutions to transition challenges. Parent-to-Parent workshops are offered through the community-based teams, 1-day education seminars, and via on-line webinars and podcasts. The Parent to Parent teams also
coordinate and deliver the MCEC Tell Me A Story® program, which is an initiative created to empower our military connected children by using literature and their own stories. This early literacy program is
geared toward children ages 4-12.
Professional Development - The MCEC Professional Development delivers online training as well as one-
day, live courses designed to enhance the current capabilities, competency, and awareness of professionals
who serve and support military-connected children and youth. This program includes the following
courses:
Supporting Military Children through School Transitions: Foundations ™ - Examines how
elements of transition impact a military family and analyzes current practices for successfully supporting military-connected students through these changes.
Supporting Military Children through School Transitions: Social/Emotional ™ - Designed for professionals who serve and support military-connected children and youth, this training focuses on
the social and emotional concerns that impact students during school transitions. Whether difficult
behaviors or falling behind academically, professionals learn to evaluate the effects of separation and
loss and develop practical methods and strategies to ease the challenges associated with repeated school transitions.
Supporting Veterans’ Children through Transitions ™ - Explores the unique academic and social-emotional challenges children often face when their parents transition from military to civilian life,
and discovers new resources and positive strategies to support them.
Responding to the Military Child with Exceptional Needs ™ - Identifies the amplified transition challenges that impact military-connected students with exceptional needs, and explores strategies that
support these unique learners as they transition from school to school.
Living in the New Normal: Helping Children Thrive through Good and Challenging Times ™ -
Examines the topics of grief, fostering resilience through positive psychology, coping with change, post-
traumatic stress and the impact on children, as well as responding to challenges through the developmental lens. Professionals will learn to recognize how a family member’s military experience
affects the child, then develop practical strategies to encourage and support resilience skills.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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Helping Military Children Discover Their SPARC: Strength, Potential, Aspirations, Resourcefulness, Confidence ™ - By exploring research informed concepts associated with thriving,
professionals who serve and support military-connected children and youth will learn how to help
students identify their sparks and interests as well as develop skills that contribute to a growth mindset. With support to discover their SPARC, students can not only meet but exceed personal and
academic goals.
The Journey from “Welcome Home” to Now: Reunion, Reconnecting, Routine ™ - Designed for
professionals who serve and support military-connected children and youth, this training teaches
strategies for successful adjustment during reintegration and reestablishment of routines following a
family member’s return after an extended absence.
Social Emotional Learning and the Military Child - This course guides professionals to understand
how social and emotional development programs positively impact academic achievement. Additionally, professionals will learn how to integrate SEL into their practice and explore the CASEL
model of interrelated cognitive, affective, and behavioral competencies: self-awareness, self-
management, social awareness, relationship skills, and responsible decision making.
We Serve Too: National Guard and Reserve Children - This course guides professionals to identify
the social, emotional, and academic impact for children of National Guard and Reserve service
members, and discover resources to help alleviate their often misunderstood and overlooked challenges. Learn to identify the unique challenges associated with their parent’s service and
understand the academic impact for these part-military, part-civilian children and youth.
Military Student Transition Consultants Programs - This MCEC initiative is in partnership with the
local school system (LEA). There are two options for campus or district professional experts to support the
transition needs of students.
Military Student Transition Consultant ™ (MSTC) – The MSTC is a full-time, highly specialized
education professional embedded within the school district. They work directly with children, parents, and school personnel on a daily basis and serve as expert “navigators”.
MSTCs advocate for military-connected students and their families to help decrease the turbulence in
family life by building resiliency in students so that they can more successfully cope and overcome
the unique challenges they face to meet their academic goals. The MSTC provides an ongoing, continuum of care to help students and parents traverse the often-confusing paths associated with
school transitions. This immediate and ongoing care is accomplished by addressing challenges and
needs, facilitating connections to school, installation, and community resources, and educating others on the unique needs of military-connected students and how to provide the best support possible.
Smooth transitions to or exiting from school and community mean that both parents and students gain
access to a professional who can respond to individual needs and anxieties in a timely and effective
way.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
- 18 -
Military Student Transition Consultant™ - Affiliate (MSTA) - The MSTA is an employee of the local education agency (LEA) able to assume additional work responsibilities in support of military-
connected students. Affiliates are on site and able to build relationships in order to problem-solve at
the local level. The purpose of the Affiliate is transition support for military-connected students. Average time commitment of Affiliates is defined by each LEA and based on campus, population
needs. The Affiliate will receive MCEC training in smooth transition support for military-
connected students. Affiliate on-boarding training will target the goals of the LEA as defined in the Memorandum of Understanding with the MCEC. The MCEC will provide direct, consistent and
purposeful support for the LEA Affiliate.
Strategic Communications - This initiative includes trade shows and conferences, outreach, government relations, public relations, social media and marketing. The MCEC communication team also develops
and publishes, in addition to our bi-annual On the Move® magazine, policy papers and reference materials.
Products and Services - Offers a variety of resources from pre-conception through high school and helping
them prepare for college. We have a variety of books and Growing Learning and Understanding kits (GLU
Kits) that focus on military kids facing separation, PCS moves, special needs and loss.
Research - The MCEC conducts major research and other studies to discover more about the needs and
strengths of military-connected children, their parents and the support systems. The MCEC research is primarily focused on transition, unique challenges related to being part of a military-connected family, and
(PK-20) educational issues.
Website and Technology Resources - This initiative includes technological maintenance and support for MCEC, and MCEC website, education resource center and software.
Grants - Various grants obtained by MCEC are used to fund a variety of programs including MSTC,
professional development, student and parent initiatives, and others. National Training Seminar - The annual seminar is a professional development and training opportunity inside of a two-day highly structured format with measurable and clearly defined outcomes.
Participants have the option of earning continuing education or graduate credit. Each seminar includes an outstanding array of keynote speakers, informative distinguished lecturers and breakout sessions, featuring
workshops with useable, relevant information focused on the subject of supporting military-connected children.
Other Program Services - The Pete Taylor Partnership of Excellence Awards program recognizes and
promotes partnerships between installations, local education agencies and communities. The M ember S ervices program offers benefits such as access to MCEC communications and publications, and discount
on attendance fees to the National Training Seminar.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
- 19 -
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of MCEC have been prepared on the accrual basis of accounting in accordance
with accounting principles generally accepted in the United States of America. MCEC receives funds
primarily from membership fees, contributions, contracts, and grants.
Basis of Presentation
MCEC reports information regarding its financial position and activities according to two classes of net assets: net assets without donor restrictions and net assets with donor restrictions.
Net Assets without Donor Restrictions—These net assets generally result from revenues generated by receiving contributions that have no donor restrictions, providing services, and
receiving interest from operating investments, less expenses incurred in providing program-
related services, raising contributions, and performing administrative functions.
Net Assets with Donor Restrictions—These net assets result from gifts of cash and other assets
that are received with donor stipulations that limit the use of the donated assets, either temporarily
or permanently, until the donor restriction expires, that is until the stipulated time restriction ends or the purpose of the restriction is accomplished, the net assets are restricted.
Revenue and Cost Recognition
MCEC recognizes revenues from fixed-price contracts once trainings are completed. Costs associated with
trainings are allocated to the program initiatives once they are completed. Program costs include all direct
materials and labor costs and those indirect costs related to initiative performance, such as indirect labor and supplies.
Functional Allocation of Expenses
The cost of providing the programs and other activities has been summarized on a functional basis in the
statement of activities. Accordingly, certain costs have been allocated among the benefiting program and supporting services.
Recognition of Donor Restrictions
Contributions received are recorded as contributions without donor restrictions or contributions with donor
restrictions depending on the existence and/or nature of any donor restrictions. Support that is restricted by
the donor is reported as an increase in net assets without donor restrictions if the restriction expires in the reporting period in which the support is recognized. All other donor-restricted support is reported as an
increase in net assets with donor restrictions depending on the nature of the restriction. When a restriction
expires, net assets are reclassified from net assets with donor restrictions to net assets without donor restrictions.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include savings and checking with a maturity of less than one year.
Accounts Receivable
Accounts receivable consist of individual, business organization, school district, and military installation
memberships, grants, and contracts.
The direct-write off policy is to remove individuals when their accounts become 90 days or more past due.
Business organizations, school districts, and military installations are removed when their accounts become six months past due. All grant and contract receivables are deemed collectible.
Inventory
Inventory is recorded at the lower of cost or market and is expensed as used in the first-in, first-out method.
Fixed Assets
Equipment is stated at cost at date of acquisition or fair market value at date of donation in the case of
donations. Depreciation is computed using the straight-line method over the estimated useful lives of the
assets. The estimated useful lives of buildings are estimated at 39-45 years and all other assets are estimated at 2-7 years. When assets are retired or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the
period. It is MCEC’s policy to capitalize expenditures for these items in excess of $ 1,000.
Income Taxes
MCEC is exempt from federal income taxes under section 501(c)(3) of the Internal Revenue Code.
Contributions
All contributions are considered to be available for unrestricted use unless specifically restricted by the
donor. For the years ended December 31, 2019 and 2018, $ 13,233 and $ 81,551, respectively, of in-kind
revenues were included in contributions. Expenses were recognized in the same amounts in management and general supporting services, or allocated to program services.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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New Accounting Pronouncement
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
(“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The ASU and all subsequently issued clarifying ASUs replaced most existing revenue recognition guidance in U.S. GAAP.
The ASU also required expanded disclosures relating to the nature, amount, timing, and uncertainty of
revenue and cash flows arising from contracts with customers. MCEC adopted the new standard effective January 1, 2019, the first day of MCEC’s fiscal year, using the full retrospective method.
The adoption of this ASU did not have a significant impact on MCEC’s financial statements. The majority of MCEC’s revenue arrangements generally consist of a single performance obligation to transfer
promised goods or services. Based on MCEC’s evaluation process and review of its contracts with
customers, the timing and amount of revenue recognized previously is consistent with how revenue is recognized under the new standard. No changes were required to previously reported revenues as a result
of the adoption and no changes were required to currently reported revenues as a result of the adoption of
this ASU.
3. Cash and Cash Equivalents
At December 31, 2019 and 2018, cash temporarily restricted for specific programs was $ 451,519 and
$ 336,051, respectively. These amounts are reported as net assets with donor restrictions.
The Lockheed Martin Corporation requires grant funds from its organization to be deposited in a separate
bank account. The balance of this account at December 31, 2019 and 2018 was $ 150,000 and $ -0-,
respectively. These funds are reported as net assets with donor restrictions.
4. Accounts Receivable
Accounts receivable consisted of the following at December 31, 2019 and 2018:
2019 2018
Contracts 175,233$ 381,734$
Grants and contributions 364,855 60,000
Membership dues and other 1,806 22,901
Accounts Receivable, net 541,894$ 464,635$
Accounts Receivable:
Unrestricted 190,994$ 404,635$
Restricted 350,900 60,000
541,894$ 464,635$
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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5. Inventory
Inventory consists of professional development materials, books, products and other resources and
operating supplies totaling $ 152,575 and $ 144,523 at December 31, 2019 and 2018, respectively.
6. Prepaid Expenses
MCEC prepays various expenses that are held as assets until the services are rendered or the goods are
received. The balance of the prepaid expense account is $ 61,204 and $ 103,135 at December 31, 2019 and
2018, respectively.
7. Property and Equipment
Property and Equipment consisted of the following at December 31, 2019 and 2018:
2019 2018
Land 245,000$ 245,000$
Building 1,487,008 1,487,008
Computers and equipment 373,197 802,519
Furniture and fixtures 281,312 283,805
Construction-in-progress 7,626 -
2,394,143 2,818,332
Less: accumulated depreciation (862,267) (1,213,094)
Property and Equipment, net 1,531,876$ 1,605,238$
Depreciation expense at December 31, 2019 and 2018 was $ 115,452 and $ 106,262, respectively.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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8. Deferred Revenue
Deferred revenue consists of the following at December 31, 2019 and 2018:
2019 2018
USAA Foundation 330,465$ 445,165$
South Carolina State Plan 127,326 1,262
Alabama State Plan 99,705 1,778
U.S. Navy 32,277 65,963
School districts/military installation membership dues 24,467 28,986
U.S. Air Force 21,211 645
Chan Zuckerberg Initiative 11,283 14,593
Texas State Plan 5,839 5,838
Colleges and universities 2,208 1,916
Armed Services YMCA 1,093 -
Norfolk Public Schools 849 5,232
Corporation 567 1,000
Wounded Warrior Project - 73,159
Deferred Revenue 657,290$ 645,537$
9. Retirement Plan MCEC has a SIMPLE retirement plan. MCEC matches employees’ contributions on a graduating scale up
to 4.0% of their compensation. MCEC’s retirement plan expense at December 31, 2019 and 2018 was
$ 88,256 and $ 92,743, respectively.
10. Net Assets
Net assets without donor restrictions represent funds received primarily from membership fees, contributions, contracts, grants, and the sale of products by MCEC without any restrictions and may be
used for purposes determined by the Board of Directors. As of December 31, 2019 and 2018, there were
net assets without donor restrictions designated by the Board for reserves in the amount of $ 482,593 and
$ 482,593, respectively.
Net assets with donor restrictions represent assets that have donor-imposed restrictions that can be removed
by the actions of management or the passage of time, or, under certain circumstances that can never be removed.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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As of December 31, 2019 and 2018, net assets with donor restrictions consisted of the following:
2019 2018
Lockheed Martin 163,734$ 53,295$
Smith Foundation 150,000 -
The USAA Foundation 142,151 108,407
Donor Contributions 80,000 75,000
Veteran's United Fund 74,367 72,697
Wounded Warrior Project 51,065 -
PAE 28,400 -
Star Market 27,500 15,756
HEB 25,813 7,174
Micron 15,500 -
Tegna 15,000 -
Boeing 15,000 -
Utley Education Foundation 8,889 8,889
Dominion 5,000 -
Compatriot Capital - 23,996
Biden Foundation - 14,587
Smith Charitable Trust - 12,412
AT&T Foundation - 3,838
Net Assets With Donor Restrictions 802,419$ 396,051$
Net assets released from restrictions by incurring expenses satisfying the restricted purposes or by
occurrence of other events specified by donors for the years ended December 31, 2019 and 2018 were
$ 1,066,736 and $ 1,715,027, respectively.
At December 31, 2019 and 2018, MCEC has no net assets with donor restrictions which contain
restrictions that can never be removed.
11. Commitments and Contingencies
MCEC’s financial records are subject to review by federal agencies. Such reviews can result in the adjustment and denial of certain contract expenditures. The federal government has the authority to
request a reimbursement from MCEC for the denied expenditures. No assurances can be given regarding
the future outcome, if any, of such reviews.
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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12. Concentrations
MCEC receives a material amount of its funding through contracts with the various military departments
and through various state plans. For the years ended December 31, 2019 and 2018, revenue concentrations are as follows:
2019 2018
Military departments 14% 12%
State plans 18% 23%
MCEC had receivables from federal contracts, state plans and a foundation which represent a significant
concentration of total receivables. At December 31, 2019 and 2018, receivables concentrations are as
follows:
2019 2018
Federal contracts 3% 29%
State plans 2% 24%
Smith Foundation 28% 0%
13. Liquidity and Reserves
MCEC has a policy to manage its liquidity and reserves following three guiding principles: operating
within a prudent range of financial stability, maintaining adequate liquidity to fund near-term operations, and maintaining sufficient reserves to provide reasonable assurance that long-term obligations will be
discharged.
The following table reflects MCECs financial assets as of December 31, 2019 and 2018, reduced by amounts not available for general expenditures within one year.
2019 2018
Financial assets:
Cash and cash equivalents 2,367,176$ 2,320,343$
Accounts receivable 541,894 464,635
Financial assets, at year-end 2,909,070 2,784,978
Less those unavailable for general expenditure within
one year due to:
Board-imposed three-month cash reserve (482,593)$ (482,593)$
Board-approved building & capital reserve fund (100,000) (100,000)
Board-approved opportunity & reserve fund (100,000) (100,000)
Financial assets available to meet cash needs for
general expenditures within one year: 2,226,477$ 2,102,385$
MILITARY CHILD EDUCATION COALITION
NOTES TO FINANCIAL STATEMENTS
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14. Fund Development Revenue
In addition to philanthropic revenue reported within the contributions and grants classifications, MCEC’s
fund development team generated $ 1,333,777 and $ 1,335,518 in contract revenue in 2019 and 2018, respectively. These revenues are from contracts with various school districts who were awarded federal
grants with the assistance of the fund development team. The school districts use those federal awards to
fund MCEC’s MSTC programs in these schools.
15. Subsequent Events
In response to the COVID-19 pandemic, MCEC headquarters began shelter-in-place on March 15, 2020 following the orders from the Governor of Texas. Remotely working staff followed their own state-of-
residence shelter-in-place guidance. All MCEC staff was deemed essential and, due to the strong financial
position, there was no need to reduce staff.
The major impact of COVID-19 to MCEC operations was the cancellation and postponement of live
student and professional development trainings. In addition, MCEC had to cancel the annual National Training Seminar, planned for July 2020, in Washington D.C. Parent to parent training teams and Military
Student Transition Consultants were able to pivot immediately and execute their programs virtually.
Their flexibility allowed MCEC to continue reaching out to parents and children. Philanthropic funders
continued to support MCEC financially, while others from which we had funds on hand allowed us to change programs supported or extending execution deadlines. The student and professional development
program managers accelerated the process of converting their programs to a virtual option and began
testing in June 2020.
On April 24, 2020, MCEC obtained a loan under the Paycheck Protection Program (PPP) in the amount
of $ 439,600. The funds will be used for payroll and other costs described in the PPP. The PPP loans are
expected to be forgiven by the government in 2020.